The battle to maintain parallel importation restrictions

Wednesday, January 20, 2016
Jacinta di Mase

The Australian Literary Agents’ Association (ALAA) represents more than one thousand established and emerging authors and illustrators across all sectors of the publishing industry.

Along with many others in the publishing community, our members were shocked to hear that the federal government is considering the repeal of existing parallel importation restrictions (PIRs) on books. These restrictions prohibit booksellers from importing books from overseas when a local edition is available.

It is ALAA’s position that the existing PIRs in the Copyright Act 1968 be preserved. We believe these protections are adequate and appropriate and they serve the intent and purpose of the Copyright Act:‘to promote creativity and innovation by providing exclusive economic rights to copyright owners and to promote the social benefits that arise from a free flow of knowledge and expression’.

Challenges to strong copyright protections

Finding the balance between competition (possibly delivering greater choice to the market and driving prices down) and encouraging investment and innovation (in the case of Australian publishing, creating incentives for, and encouraging a healthy local market for Australian authors and their works) is a constant challenge. ALAA believes that the protections and provisions provided by the current Copyright Act meets this challenge – it’s a system that is as fair for educators and for content creators as it is for authors and consumers. Current copyright protections have been an essential incentive enabling publishers to invest in the creation of a healthy and robust publishing industry. Australian writers are now respected, and read, throughout the world.

The Ideas Boom

Prime Minister Malcolm Turnbull recently talked about an ‘ideas boom’ to replace the resources boom when he urged Australian business to invest more heavily in innovation and ‘risk’. The Australian publishing industry is already an ‘ideas’ business and we have been innovating and taking risks, without subsidy, for many, many years. If anything, our industry should be upheld as a model for others to follow.

Instead, we’re facing yet another review into the creative protections that the restrictions on parallel imports provide.

There can be no long-term growth for Australian writers, or for publishing and associated industries, if the present restrictions to the parallel importation of books are changed. The current system allows authors to maximise their income and exposure through the separation of rights and the worldwide licensing of their copyright. It also allows publishers to invest in emerging authors, secure in the knowledge that their production, editorial, marketing, and publicity investment won’t be undercut by cheap imports. In short, the current restrictions provide a safety net that allows risk – a key factor required for building the careers of emerging writers and illustrators.

What price are the voices of Australian authors? The outcome of parallel importing

It’s worth thinking about which books – from the more than 450,000 new titles per annum available to them – booksellers would choose to import if the market were opened. Our research indicates that children’s books and commercial literary fiction by Australian writers and illustrators are the two areas that would be most affected by competing imports.

Fiction titles such as Richard Flanagan’s Booker Prize winning ‘The Narrow Road to the Deep North’, Hannah Kent’s ‘Burial Rites’, Liane Moriarty’s ‘Big Little Lies’ and iconic children’s titles such as ‘Where is the Green Sheep?’ by Mem Fox and Judy Horacek will be jeopardised in an open market.

For example: ‘The Narrow Road to the Deep North’ by Richard Flanagan

  • Flanagan’s home royalty would be undercut by cheaper imports: The Australian recommended retail price (ARP) of the B-format paperback edition of ‘The Narrow Road to the Deep North’ is AUD$19.99 (although retailers are already able to sell this edition at a discount enabling consumers to shop around for cheaper editions both in store and online). But the author still earns a royalty on the official RRP, approximately $2 per copy regardless of what price the consumer pays for the book. Whereas on imported cheaper editions purchased in Australia, the author receives only 10% of net receipts (after discounts, cost of shipping etc are deducted). In most cases paying less than 25% of the home royalty. Our Copyright Act already enables the importation of single copies of a cheaper edition – the irony being that via Amazon, consumers can already import the US edition of ‘The Narrow Road to the Deep North’ for USD8.77 (plus shipping).
  • Meanwhile, Richard’s Australian publisher, who has put the investment into building his career over more than 20 years, would receive nothing from this import sale.

Another horrifying result of sending this money offshore will mean that many local titles such as Clare Wright’s award winning ‘The Forgotten Rebels of Eureka’ will not be published. Current Copyright protections allow the kind of investment and innovation that enabled Text Publishing to invest heavily in this title and in Clare Wright’s next book, which she is in the process of researching. These invaluable and important stories and histories about our culture, our history, and our future will simply cease to be published in any meaningful way.

It is worth saving a few dollars at the expense of creators while supporting foreign economies and multinationals companies that don’t invest in our culture or economy and don’t pay tax in Australia?

Leakage. The Debate About Restrictions and Unsustainable work practices:

The Productivity Commission review has also argued, that the PIR protection extended to foreign authors whose books are published in Australia is ‘leaking’ money into foreign pockets implying that local authors and publishers don’t benefit in these cases. The fact is that the whole Australian publishing industry benefits from these protections in myriad ways. Local authors benefit from having a vibrant, diverse, and solvent publishing industry in which to offer the rights to their works. The Australian offices of foreign publishing companies, employ Australians, and for most trade titles, print locally. They publish local authors with verve and passion and most importantly with success, Brooke Clarke’s best selling debut, ‘Lost and Found’ published by Hachette Australia is a perfect example of this passion and local innovation.

Some booksellers argue that PIRs prevent them from importing ‘better value-for-money’ editions of books. However, we get what we pay for: cheaper editions (or ‘shoddy dumping’ as it’s known in the industry) are most often a result of cheaper production costs: maintained by a poorly paid workforce (Asia and India), unsustainable paper supplies, poor quality design and production. These books are produced by non-Australian labour – isn’t that a system that ‘leaks’ money offshore and takes Australian jobs?

Given that the Turnbull Government’s mandate is to stimulate the economy and preserve local jobs it seems outrageous that the PC should be recommending a course of action that will quite plainly send jobs offshore. There will be far more than a ‘leakage’ to foreign-owned companies – it will be a flood!

Many members of the publishing industry feel as strongly as we do:

‘Everything is to be sacrificed to the workings of the free market -- especially writers, independent booksellers, independent publishers, and the nation's cultural integrity. Parallel imports are banned in the US and the UK, and the UK often publishes books several months after they come out in the US. Our peculiar problem is that we are a small English-language market, exposed by the above factors in an economy that can never produce the economies of scale enjoyed by our larger competitors.’ - Henry Rosenbloom, Founder and Publisher of Scribe Publications

‘If the government is not pulling money from the Australia Council, it's giving our overseas competitors as many advantages as it can – by doing away with our territorial rights [that limit the power of foreign publishing houses] and not doing anything about the GST discrepancy [between local and international online book sales].’ - Chris Feik, editor of ‘Quarterly Essay’ and publisher at Black Inc

‘Removing PIRs threatens local authors and allows the publishers of London and New York to get an even tighter grip on the Australian book market. Authors have already been hit hard by a big drop in book prices, which has caused an average halving of their writing income over the last decade. Using academic theories about competition to interfere in the creation of Australian culture is sure to make the situation of authors even worse.’ - David Day, Executive Director, Australian Society of Authors

‘The open market does away with your local market and does not lower book prices. Why invest in a book so that the Book Depository and Amazon can make a fortune?’ - Kevin Chapman, Founder of Upstart Press, and former Managing Director of Hachette New Zealand

At this time, while other countries are looking for ways to strengthen their territorial copyright why would Australia choose to open our market and allow others to benefit?

Like the Forgotten Rebels of Eureka we need to defend our rights and our industry. Rebel! Urge the government to maintain the current provisions that allow innovation and investment in our industry and in books that entertain, engage, and inspire. Write to:

Senator the Hon Mitch Fifield, Minister for the Arts

The Hon Scott Morrison MP, Treasurer

Senator the Hon Stephen Parry, President of the Senate
Hon Mark Dreyfus QC MP, Shadow Minister for the Arts

Sign the ASA petition and join their campaign.

About Jacinta di Mase

Jacinta di Mase has a background in book selling and publishing, and worked for ten years in two of Australia’s premier literary agencies: Australian Literary Management (ALM), and Jenny Darling & Associates. After more than 20 years experience in the book industry, Jacinta di Mase started her own agency in 2004, Jacinta di Mase Management. Jacinta is a member of the Australian Literary Agents’ Association (ALAA) and its current President.

This article was originally published in The Victorian Writer magazine.